from the well-there-goes-that-one dept

While the Google/Viacom lawsuit over YouTube settled this week, one case that it had a direct impact on was the lawsuit of Capitol Records/EMI against MP3Tunes and its founder Michael Robertson. The entire lawsuit seemed to be yet another case involving the record labels just being generally angry about innovation, which is why it targeted Robertson personally. While MP3Tunes initially, won, the court still found that Robertson could be personally liable for songs that he had "sideloaded" himself as a part of the service.

The case then bounced around a bit, and with the appeals court ruling in the YouTube case, the judge in the MP3Tunes case withdrew the original ruling and decided to take another look. That's now resulted in a jury apparently finding that MP3Tunes was "willfully blind" to infringement. That's a troubling find on many levels. While the link above focuses on the jury also finding Robertson personally liable for "sideloading" songs, that part isn't all that surprising. Without thinking too deeply about it, it's no surprise that a jury would think that sideloading (moving songs found publicly online into a locker) might violate copyright law, even if it does raise some significant legal issues. Robertson made the rather valid point that it was impossible for him to know if the songs were infringing, especially since EMI itself was giving away songs for free, and knew that having such songs freely available increased sales. So to blame him for not knowing which songs were authorized and which were not seems unfair -- but the jury apparently disagrees.

What's much more concerning is this claim that an online locker service might be deemed "willfully blind" to infringement, even in the absence of things like DMCA notices. It raises serious questions for pretty much all cloud services that might store content, much of which may be covered by someone's copyright.

from the you-can't-put-a-price-on-freedom dept

It's no secret that Google's music locker service is struggling, but the company still seems committed to making it a success. To do so, they'll need to do big things, and break through the barriers that the record industry places in their path. Music columnist Wayne Rosso reports that an unnamed source told him Google is making bold overtures in that direction, and has offered at least one major record label a $1-billion contract for blanket worldwide rights to their entire catalog (thanks to Colin for sending this in). It's still unconfirmed, but it echos something Glyn wrote last year (which Rosso also refers to) about the possibility of Google or a consortium of internet companies simply buying out the record industry (and noting that Larry Page, Serge Brin and Eric Schmidt could afford to do so with their personal fortunes).

Rosso's source, however, isn't exactly sanguine about the idea:

What, one may ask, is Google thinking? “Who knows,” said the source. “It really doesn’t matter because they would screw it up anyway (referring to the fact that Google’s music service has been less than dazzling). Evidently they have a big content group and they have to have something to do to justify their existence.”

So how have the labels responded? “They’re just shrugging and stringing Google along, trying to keep milking cash out of them”, says the source. “They want the money but on the other hand they hate Google. It really sticks in their craw that Google continues to present links to pirated content at the top of their search results.”

I think that, if true, this says something much different. Google is not trying to "justify" anything—they know that there is tremendous opportunity in the field of online music services if only the labels will loosen the reins a bit. And they are willing to bet billions on that belief. The problem with online music offerings is that the people who design them simply don't think the same way the recording industry does. They want to make cool, useful, engaging services full of both common sense features and innovative ones, deployed on multiple platforms all over the world, fully leveraging the technology that is available—but licensing restrictions interfere with every single step of that process. Design and development are inextricably linked with tedious contract negotiations and the fear of lawsuits. It's extremely difficult to get a good product as a result—and if you do, the labels clamp down to see where they can extract more money from it. If Google is trying to buy blanket licenses with no restrictions at a high price tag, it's because they want to escape that cycle. They want a clear and open playing field on which to build services the way they want to build them, without having to beg the labels for permission at every turn. In a market that has only scratched the surface of the economic possibilities of digital music, such a playing field would be well worth the money.

from the revenue-vs.-piracy dept

I keep having the same conversation over and over again with people in the recording industry. A few days ago, I met with the head of a record label that is doing all sorts of cool and innovative experiments (both on the business model and with technology) and he still kept saying "but we gotta stop people from stealing." The problem, as always, is that they seem so focused on infringement that they miss the bigger picture: What does it actually mean for revenue? These are two separate questions, and the labels seem to prioritize the wrong one. They want to stomp out infringement at any cost, even if the net benefit is minimal.

If record labels were given a choice whereby they could support a new revenue stream that would bring in, say, $100 million without them having to do anything... vs. getting no such revenue and playing whac-a-mole with a few more "pirate sites," just making them move elsewhere and not actually get anyone to buy anything, they'd have to be crazy to not go with the $100 million option.

It appears they're crazy.

Google was clear, when it launched its Google Music, that it wanted to do much, much more, but that the things it wanted to do required licenses from the labels. However, the terms the labels offered were completely unacceptable. Now it's being reported that Google offered $100 million to the labels, and a key sticking point was that the labels wanted Google to wave a magic wand, figure out who was "pirating" music, and stop it. In other words, $100 million vs. Fantasyland. And the labels went with Fantasyland.

from the no-wonder-they're-confused dept

Via Glyn Moody, we get this bizarre story, which demonstrates how some "new media" execs at the major labels don't seem to understand "new media." A few weeks back, Michael Robertson had revealed the ridiculous demands that the major labels were making on anyone who wanted to license content for a cloud music player. Most of the demands made absolutely no sense and represented an ignorance of the technology involved. Remember, these services are about people uploading music they already have so that they can listen to it elsewhere. It's not about sharing music at all. Yet the labels, in their ultimate paranoia, continue to insist it is. Wayne Borean posted a link to Robertson's story on the astroturfing "Balanced Copyright" page, that is a front for the major record labels. Jeff Thistle, who is the "Director of New Media" for EMI Canada responded (also mirrored here), saying that these demands were "all reasonable." When Borean challenged him on this, Thistle replied:

What measures do you propose be put in place to prevent the uploading of major label owned content? I can't speak to the mechanism to determine what an annual fee would be (presumably it would be by percentage of catalogue * number of lockers that the content resides in), but asking that controls be put in place to prevent the service from becoming another illegal sharing vehicle is *very* reasonable.

How does that make any sense at all? Why should anyone, who has a legal and authorized copy of major label content, be prevented from storing it online to listen to it remotely? And most of these digital lockers don't allow downloads and are only for the one user who uploaded their own music. The claim that these will become "another illegal sharing vehicle" is a total red herring. So they make up a red herring and pretend they're doing this to "protect" that which doesn't need protecting... when the reality is that they're just trying to force people to pay over and over and over again for music they already paid for.

from the you-have-to-be-kidding-me dept

As there's been lots of talk lately about music lockers and whether or not they need to get licenses, it's great to see Michael Robertson, who runs the music locker MP3Tunes, provide a little background on just a few of the ridiculous demands from the record labels when it comes to music lockers. Remember, again, that music lockers are all about people taking the music that they already have, placing it on a different hard drive (a remote hard drive) and being able to stream (or possibly download) it. There's a very strong argument (and one that Robertson is fighting for in court) that the record labels really have no say in this matter whatsoever. There are no specific additional rights that they need to license here. The people already have the music, and it's just a question of where the hard drive is and how long the wire is between that hard drive and the listener.

Of course, the real issue is that (yet again) the record labels are more afraid of unauthorized copies than they are of trying to provide actual value to users. And that has become clear in the demands from the labels, including the insane argument from Universal Music that only specially marked files with digital receipts should be allowed in music lockers. That is, if you have legally purchased CDs and legally ripped the music from those CDs... too freaking bad. As someone who still buys most of my music on CD, that's pretty ridiculous. They're telling me that I can't store my legally purchased music on a server of my own choosing?

To combat this they [Universal Music] want only songs with digital receipts to be able to added to lockers. For some time UMG has been demanding that online music retailers embed personal information in every song they sell. They call it UITS. iTunes has been inserting email addresses into every song while other retailers like Napster are using a unique receipt number....

All songs without a proof of purchase would be assumed to be unauthorized and not accepted into the system. Songs ripped from CDs would not have unique identifiers and wouldn't be loaded. Any song purchased prior to retailers inserting personal identifiers or from retailers who have yet to personalize every song would also be excluded. (To date, Amazon's MP3 store does not put any unique identifiers in songs despite UMG's demand that they do so.) Promotional songs download online would also not work.

Of course, that's a complete nonstarter, and would make music lockers almost useless for most users, even those of us who do, in fact, legally purchase our music. Sony Music apparently has a slightly different concern, but an equally dumb idea:

Sony believes users will share lockers by visiting each others houses and syncing in each others music. To combat this Sony wants loading to happen from only one computer. Each locker owner would have to designate a single location from which they could upload songs. Users could load music from either their laptop or desktop or office computer but not all three. Their belief is that this will prevent friend to friend file sharing.

Can you imagine what a headache that would be? It kind of defeats the whole purpose of the music locker. It also would create a huge headache for any music locker service in terms of dealing with customer complaints and customer support when someone buys a new computer and dumps the "officially designated" uploader machine. It's a concept from someone who doesn't understand how people use computers these days.

And then there's Warner Music Group, which is so afraid of file sharing that it wants to make sure it can track you down and sue you if you use your locker in a way it doesn't like apparently:

Most worrisome to Warner Music Group is that users may setup multiple lockers and the distribute the extra lockers to friends. Imagine if a locker owner setup a locker at Apple and Amazon and then gave their less used locker away or maybe even sold it. What WMG would like to see happen is that a central locker authority would administer all locker assignments. For awhile they were pushing Catch Media as the solution. More recently they may have relaxed their demands in this area and insisted that locker identities be uniquely tied to a valid credit card or some other such verified identity.

This is so typical of the big record labels. Rather than looking at ways to provide more value and recognize how the world works, all they do is seek restrictions and annoyances. To be honest, I've still been hopeful that they'd eventually come around and figure out how to adapt, but these days I'm finally realizing that maybe they really do need to die off.

from the what-are-you-scared-of? dept

There's been a lot of attention paid on various news sites over the past few weeks to the motions for summary judgment in the MP3Tunes case. If you don't recall, EMI sued MP3Tunes and (separately) its founder, Michael Robertson, arguing that the music locker service violated copyright law, even though it's designed to let individuals store and access their own music -- but not to allow others to access that music. The whole case has been quite bizarre and we're finally getting close to at least an initial ruling on how the court sees things. I was waiting until that ruling came out to cover it, but EMI's latest move is somewhat baffling.

You see, the EFF, Public Knowledge, the Consumer Electronics Association and the Home Recording Rights Coalition teamed up to file an amicus brief. That's nothing surprising and barely noteworthy. Those groups file amicus briefs on all sorts of similar cases having to do with the entertainment industry trying to stretch the interpretation of copyright law in a way that hinders new technologies. What makes things odd is that EMI has filed to have the court bar the brief from being used. The arguments are somewhat silly. Effectively, they argue that the court had asked the parties to keep their own arguments for summary judgment to a minimum (less than 35 pages). However, EMI states, this brief is really just supporting MP3Tunes' position, and thus, giving MP3Tunes a way to get more arguments than the 35-page limit allows.

Of course, it seems like all this really serves to do is to call a lot more attention to the EFF/PK/CEA amicus brief and to make you wonder what the hell EMI is so scared of having the court read about. And, really, shouldn't EMI be focused on staying in business these days, rather than worrying about what folks like the EFF and PK have to say about copyright law? If you want, you can see both the amicus brief and EMI's complaint about it after the jump.